Author: Evelyn S. Devadason, University of Malaya
The food sector has the potential to benefit greatly in the new ASEAN Economic Community (AEC). But because food products attract higher levels of regulation, which often varies between member countries, a significant number of non-tariff measures (NTMs) remain.
For trade purposes, ASEAN members have begun to recognise the desirability of acommon set of regional regulations for food companies to adhere to, instead of adjusting to a diverse array of national standards. In turn, member states have expressed their intention to use global food standards as a basis for regional harmonisation efforts. Yet this process remains slow and patchy.
One contributing factor is information shortcomings on the extent of the diversity of NTMs within the member states. According to a new NTM database — jointly developed by the Economic Research Institute of ASEAN (ERIA) and the United Nations Conference on Trade and Development (UNCTAD) — the food sector remains highly regulated in Brunei, Malaysia and Singapore.
In the case of Malaysia, a total of 471 NTMs — 66 per cent of total public NTMs — are found in the food sector, affecting 740 products or approximately 93 per cent of total products. This is significantly higher than the number of NTMs reported in the food sector in the Asian Development Bank’s ASEAN database and the total number of notifications made to the WTO by Malaysia, which are only 352 and 252 respectively. The ADB’s database and the WTO notifications are clearly not an accurate reflection of the number of NTMs in the country.
The ERIA–UNCTAD database also shows that for the technical measures category, 51 per cent of NTMs in the food sector in Malaysia constitute technical barriers to trade while 46 per cent are sanitary and phytosanitary measures. The NTMs that dominate the food sector within both categories include restricted use of certain substances in foods and their contact materials, product quality, performance requirements and labelling requirements.